Stock market today: Wall Street holds onto its gains after the Fed keeps interest rates steady

NEW YORK (AP) — U.S. stock indexes are rising modestly Wednesday after the Federal Reserve kept its main interest rate steady, as was widely expected.

The S&P 500 was up 0.5% in afternoon trading, moving little following the Fed's announcement. The Dow Jones Industrial Average was up 146 points, or 0.4%, as of 2:05 p.m. Eastern time, and the Nasdaq composite was 0.7% higher.

The relatively quiet trading provides a respite following weeks of sharp and scary swings for the U.S. stock market. Uncertainty is high about how much pain President Donald Trump will allow the economy to endure in order to remake the system as he wants. He’s said he wants manufacturing jobs back in the United States and far fewer people working for the federal government.

Trump’s barrage of announcements on tariffs and other policies have created so much uncertainty that economists worry U.S. businesses and households may freeze and pull back on their spending.

Against such a cloudy backdrop, the Fed decided to wait and see how conditions play out before making its next move on interest rates. Lower rates would give the economy a boost, but they could also push up inflation when worries are already high about it because of tariffs.

Fed officials also indicated they may cut rates twice by the end of this year, just as they were forecasting at the end of last year. But they also are penciling in weaker growth for the U.S. economy and higher inflation.

At the moment, the job market seems to be relatively solid overall after the economy closed last year running at a solid pace. But the median Fed official sees U.S. economic growth slowing to 1.7% at the end of this year, down from a prior forecast of 2.1% made in December.

That raises fears about what's called “ stagflation,” where the economy is stagnating but inflation remains high. The Fed doesn't have good tools to fix such a toxic combination.

On Wall Street, Nvidia helped support the market after rising 2.8% to cut its loss for the year so far to 11.6%. It hosted an event Tuesday where it largely “did a nice job laying out the roadmap” and fighting back against speculation the artificial-intelligence industry is seeing a slowdown in demand for computing power, according to UBS analysts led by Timothy Arcuri.

Tesla also rose 4.1%, following two straight losses of roughly 5%. It’s still down 41.9% for 2025 so far. It's been struggling on worries that customers are turned off by CEO Elon Musk's leading efforts to slash spending by the U.S. government.

Big Tech has generally been at the center of the market’s recent sell-off, as stocks whose momentum had earlier seemed unstoppable have since dropped sharply following criticism they had simply grown too expensive.

On the losing side of Wall Street Wednesday was General Mills, which fell 2.2% despite reporting a stronger profit for the latest quarter than analysts expected.

The cereal and snack maker's revenue fell short of analysts' targets, in part because of a slowdown in sales for snacks. General Mills also cut forecasts for revenue and profit over its full fiscal year, partly because it expects “macroeconomic uncertainty” to continue to affect its customers.

In stock markets abroad, Japan’s Nikkei 225 slipped 0.2% after the Bank of Japan held steady on its own interest rates, as was widely expected. Japan also reported a trade surplus for February, with exports rising more than 11% as manufacturers rushed to beat rising tariffs imposed by Trump.

Other indexes were mixed across Europe and Asia.

In the bond market, the action was a bit stronger. The yield on the 10-year Treasury dropped to 4.29% from 4.31% just before the Fed announced its decision. The central bank said it would begin paring the monthly reductions of its trove of Treasurys beginning in April, down to a cap of $5 billion from $25 billion.

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AP Business Writers Yuri Kageyama and Matt Ott contributed.